PayFi, short for Payment Finance, is a wide-ranging concept that usually describes the blend of payment financing and decentralized finance (DeFi). It uses blockchain technology to provide quicker, more efficient, and possibly less expensive financial transactions, helping to maximize the time value of money.
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Lily Liu, the President of the Solana Foundation, is known for coming up with the term Payment Finance. She describes it as a way to create new financial markets that focus on the time value of money. Liu believes that on-chain finance can lead to innovative financial products and experiences that traditional finance or web2 can’t offer.
While DeFi has a wide range of financial services like staking and lending, PayFi zeroes in on real-time settlement, making it easier for people and businesses to tap into the time value of money more effectively.
According to Messari’s “The Crypto Theses 2025” report, PayFi plays a crucial role in connecting two promising ecosystems, RWA and DeFi, by addressing their key issues. The illiquidity of RWAs, despite their significant value, and DeFi’s disconnect from the real economy could be improved through the smart application of PayFi solutions.
Conclusion
Payment Finance (PayFi) is shaking up how payments are made in the financial world, including both traditional and decentralized finance. With the right Payment Finance solutions in place, users can tap into future capital “now” and fund their various interests.
We’re just scratching the surface of the PayFi movement, but the possibilities are huge. By linking real-world assets, streamlining payments, and blending DeFi with traditional finance, PayFi is changing the game in finance.
Plus, events like the 2024 PayFi Summit, co-hosted by Solana, are helping to spread the word and boost community growth. Thanks to the innovative nature of this technology, Payment Finance applications are set to quickly extend beyond the digital realm and make a real impact on the economy.